Biden to Chinese Premier: ‘We Appreciate Your Investment in U.S. Treasuries’

August 19, 2011 - 11:21 AM

( - Vice President Joe Biden told Chinese Premier Wen Jiabao today that the United States appreciates China’s investment in U.S. government debt.

“We appreciate and welcome your concluding that the United States is such a safe haven because we appreciate your investment in U.S. treasuries,” Biden said as the two officials made a joint appearance in front of reporters in Beijing. “And very sincerely, I want to make clear that you have nothing to worry about in terms of their--their viability.”

China, according to the State Department’s most recent human rights report, is “an authoritarian state in which the Chinese Communist Party (CCP) constitutionally is the paramount authority.”

Although China has dramatically decreased its ownership of short-term U.S. Treasury bills over the past two years (dropping its holdings of these short-term U.S. government securities from $ 210.4 billion in May 2009 to $4.5 billion in June 2011), China nonetheless retains large holdings of longer-term U.S. Treasury securities and remains the single largest foreign holder of U.S. government debt.

As of June, according to the Treasury Department’s latest data, mainland China held a total of $1.1656 trillion in U.S. debt—or 29.5 percent of the $4.4992 trillion in U.S. debt held by foreign interests.

Wen lauded Biden for sending a message to China that U.S. government will honor its obligations in servicing its debt.

“It’s particularly important that you sent a very clear message to the Chinese public that the United States will keep its word or--and its obligations with regard to its government debt,” Wen said. “It will preserve the safety, liquidity and value of U.S. treasuries.”